Indictment — United States v. James Frank Austin, Jr. and Rosalend Way (Middle District of Georgia)

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An Indictment filed 09/11/24 as Document 1 in United States of America v. James Frank Austin, Jr. and Rosalend Way, No. 5:24-cr-00048-MTT-CHW, in the U.S. District Court for the Middle District of Georgia, Macon Division. Count One and Count Three charge bank fraud under 18 U.S.C. § 1344, and Count Two charges conspiracy to commit wire fraud under 18 U.S.C. § 1349. The grand jury alleges PPP applications for Austin Smith Center for Community Development and Propel Opportunity Fund, including $654,315.00 from Cross River Bank, $1,051,395.00 through Kabbage, Inc. and $372,500.00 from Legacy Bank, with false employee and payroll figures. Count Four charges money laundering, and the indictment includes forfeiture allegations.

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“Indictment — United States v. James Frank Austin, Jr. and Rosalend Way (Middle District of Georgia).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/indictment-no-5-24-cr-00048-dkt-1-b7cb79ba05/, SHA-256 6338663e8edcd2bda1979f8b8e85f9f1693197e34f690ea4f551ed2cb26547ac.

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Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MACON DIVISION

UNITED STATES OF AMERICA UNDER SEAL

v. INDICTMENT

JAMES FRANK AUSTIN, JR. CRIMINAL NO. 5:24-CR-- - - -
and
ROSALEND WAY VIOLATIONS:
18 u.s.c. § 1344
18 U.S.C. § 1349 i/c/w
18 u.s.c. § 1343
18 u.s.c. § 1957
18 u.s.c. § 2
18 U.S.C. § 981(a)(l)(C)
18 U.S.C. § 982(a)(l)
18 U.S.C. § 982(a)(2)
28 U.S.C. § 2461(c)
THE GRAND JURY CHARGES:

GENERAL INTRODUCTION
At all times material to this Indictment:

Relevant Entities

I. Austin Smith Center for Community Development ("ASCCD") was an entity established by

JAMES FRANK AUSTIN, JR.

2. Propel Opportunity Fund ("POF'') was an entity established by JAMES FRANK AUSTIN,

JR.

3. POF had an account with Renasant Bank wherein JAMES FRANK AUSTIN, JR. was the

authorized signer for POF's Renasant account ending in 2481.

The Paycheck Protection Program

4. The Paycheck Protection Program ("PPP") was a COVID-19 pandemic relief program

administered by the Small Business Administration ("SBA") that provided forgivable loans to

small businesses for job retention and certain other expenses. The PPP permitted participating
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 2 of 12

third-party lenders to approve and disburse SBA-backed PPP loans to cover payroll, fixed

debts, utilities, rent/mortgage, accounts payable and other bills incurred by qualifying

businesses during, and resulting from, the COVID-19 pandemic. PPP loans were fully

guaranteed by the SBA.

5. To obtain a PPP loan, a qualifying business had to submit a PPP loan application, which was

signed by an authorized representative of the business. The PPP loan application required the

business (through its authorized representative) to acknowledge the program rules and make

certain affirmative certifications to be eligible to obtain the PPP loan, including that the

business was in operation and either had employees for whom it paid salaries and payroll taxes

or paid independent contractors. A business applying for a PPP loan was required to provide

documentation showing its payroll expenses, such as filed federal income tax documents.

6. PPP loan applications were electronically submitted or caused to be submitted by the borrower

and received through SBA servers located in Virginia. Once approved, the business received

the PPP loan proceeds via an electronic funds transfer from the third-party lender to a financial

account under the control of the business.

7. The proceeds of a PPP loan could be used for certain specified items, such as payroll costs,

costs related to the continuation of group health care benefits, or mo1igage interest payments.

The proceeds of a PPP loan were not permitted to be used by the borrowers to purchase

consumer goods, automobiles, personal residences, clothing, jewelry, to pay the borrower's

personal federal income taxes, or to fund the bonower's ordinary day-to-day living expenses

unrelated to the specified authorized expenses.

8. Cross River Bank ("Cross River") was a third-party participating lender in the PPP and a

federally insured financial institution as defined in 18 U.S.C. § 20.

2
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 3 of 12

9. Kabbage, Inc. ("Kabbage") was a was a third-party participating lender in the PPP.

10. Legacy Bank ("Legacy") was a was a third-party participating lender in the PPP and a federally

insured financial institution as defined in 18 U.S.C. § 20.

PPP Loans Obtained by Relevant Entities

11. The proceeds from ASCCD's PPP loan and both of POF's PPP loans were deposited into

POF's Renasant account ending in 2481.

12. On May 9, 2020, ASCCD applied for a $654,315.00 PPP loan with Cross River. This

application was submitted in JAMES FRANK AUSTIN JR. 'S name. This loan was approved

and on May 12, 2020, the funds were deposited into POF's Renasant account ending in 2481.

13. On June 21, 2020, POF applied for a $1,051,395.00 PPP loan with Kabbage. This application

was submitted by ROSALEND WAY. This loan was approved and on June 23, 2020, the

funds were deposited into POF's Renasant account ending in 2481.

14. On March 8, 2021, POF applied for a $372,500.00 PPP loan with Legacy. This application

was submitted in JAMES FRANK AUSTIN JR.'s name. This loan was approved and on

March 15, 2021, the funds were deposited into POF's Renasant account ending in 2481.

COUNT ONE
(Bank Fraud)

From on or about May 9, 2020, through on or about September 30, 2020, in the Middle

District of Georgia and elsewhere within the jurisdiction of this Court, the Defendant

JAMES FRANK AUSTIN JR.,

did knowingly execute a scheme and artifice to defraud Cross River Bank, a financial institution,

the deposits of which were then insured by the Federal Deposit Insurance Corporation, and to

obtain by means of false and fraudulent pretenses, representations, and promises moneys, funds,

3
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 4 of 12

credits, assets, securities, and other property owned by and under the custody and control of Cross

River Bank, all in violation of Title 18, United States Code, Section 1344.

A. Background

1. The allegations contained in paragraphs 1 through 14 of the General Introduction of this

Indictment are incorporated by reference as if set forth fully herein.

B. The Scheme and Artifice to Defraud

1. On or about May 9, 2020, JAMES FRANK AUSTIN, JR. submitted and caused to be

submitted a false and fraudulent PPP loan application on behalf of ASCCD.

2. In the false and fraudulent PPP application JAMES FRANK AUSTIN, JR. ce1tified to the

following:

a. That ASCCD was in operation on February 15, 2020, and had employees for whom it

paid salaries and payroll taxes or paid independent contractors.

b. That ASCCD would use the funds to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments as specified under

the PPP rules.

3. The false and fraudulent PPP application stated that ASCCD had 15 employees and that

ASCCD's average monthly payroll was $654,315.00. As a suppo1iing document for the

ASCCD application submitted to Cross River, JAMES FRANK AUSTIN, JR. submitted and

caused to be submitted false and fraudulent Forms 941 indicating that for each quaiier of 20 19

ASCCD had 26 employees who were paid a total of $648,908.

4. However, IRS records reflect that as of August 11 , 2021, ASCCD had not filed any Forms 941

for 2019, nor had ASCCD filed a corporate tax return. ASCCD's bank statements do not

reflect payroll as suggested in the false and fraudulent PPP application.

4
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 5 of 12

5. This PPP application was approved and ASCCD was awarded $654,315.00 on May 12, 2020,

said funds being deposited into POF's Renasant account ending in 2481.

6. Instead of being spent on payroll or make mo1tgage interest payments, lease payments, and

utility payments as specified under the PPP rules, JAMES FRANK AUSTIN, JR. used the

majority of these funds for personal use.

All in violation of Title 18, United States Code, Section 1344.

COUNT TWO
(Conspiracy to Commit Wire Fraud)

A. Introduction

1. The allegations contained in paragraphs 1 through 14 of the General Introduction of this

Indictment are incorporated by reference as if set forth fully herein.

B. The Conspiracy and Its Objects

Beginning on or about June 21, 2020, and continuing until on or about January 31 , 2022,

in the Macon Division of the Middle District of Georgia and elsewhere within the jurisdiction of

this Comt, the Defendants,

JAMES FRANK AUSTIN, JR.,
and
ROSALEND WAY,

did knowingly combine, conspire, confederate, and agree with each other to knowingly and

willfully devise a scheme and aitifice to defraud and to obtain money by means of false and

fraudulent pretenses, representations, and promises, and to transmit and cause to be transmitted by

wire in interstate commerce some communication for the purpose of executing the scheme to

defraud, in violation of Title 18, United States Code, Section 1343.

5
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 6 of 12

The objects of the conspiracy were:

1. To submit and cause to be submitted a false and fraudulent PPP loan application in order to

obtain funds; and

2. To enrich themselves, using the PPP loan proceeds for personal use rather than the use

allocated under the provisions of the PPP.

C. Manner and Means of the Scheme and Artifice to Defraud

The manner and means whereby the conspiracy was sought to be accomplished were as

follows:

1. On or about June 21, 2020, JAMES FRANK AUSTIN, JR. and ROSALEND WAY

submitted and caused to be submitted a fraudulent PPP loan application on behalf of POF.

This application listed ROSALEND WAY as the primary contact and 100% owner with

JAMES FRANK AUSTIN, JR.'S email address listed as the contact email.

2. This false and fraudulent PPP application that was electronically signed by ROSALEND

WAY was sent from an IP address subscribed to JAMES FRANK AUSTIN, JR. at an address

in Macon, Georgia. Once submitted, the application was sent via electronic wires to the servers

located in Virginia.

3. In the false and fraudulent PPP loan application, ROSALEND WAY certified to the

following:

a. That POF was in operation on February 15, 2020, and had employees for whom it paid

salaries and payroll taxes or paid independent contractors.

b. That POF would use the funds to retain workers and maintain payroll or make mortgage

interest payments, lease payments, and utility payments as specified under the PPP

rules.

6
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 7 of 12

4. The false and fraudulent PPP application stated that POF had 18 employees and that POF's

average monthly payroll was $420,558.00. As a supporting document for the POF application,

ROSALEND WAY and JAMES FRANK AUSTIN, JR. submitted a fraudulent W-3 that

indicated POF had paid $4,999,789.00 in wages in 2019.

5. However, IRS records reflect that POF's corporate tax return for 2019, that was signed by

JAMES FRANK AUSTIN, JR. on June 12, 2020, showed that POF did not pay any salaries

and wages. POF's bank statements do not reflect payroll as suggested in the false and

fraudulent PPP application.

6. This PPP application was approved and POF was awarded $1,051,395.00 on June 23, 2020,

said funds being deposited into POF's Renasant account ending in 2481.

7. Instead of being spent on payroll or make mortgage interest payments, lease payments, and

utility payments as specified under the PPP rules, JAMES FRANK AUSTIN, JR. and

ROSALEND WAY used the majority of these funds for personal use.

All in violation of Title 18, United States Code, Section 1349.

COUNT THREE
(Bank Fraud)

From on or about March 8, 2021, through on or about August 31, 2021, in the Middle

District of Georgia and elsewhere within the jurisdiction of this Court, the Defendant

JAMES FRANK AUSTIN, JR.,

did knowingly execute a scheme and artifice to defraud Legacy Bank, a financial institution, the

deposits of which were then insured by the Federal Deposit Insurance Corporation, and to obtain

by means of false and fraudulent pretenses, representations, and promises moneys, funds, credits,

assets, securities, and other property owned by and under the custody and control of Legacy Bank,

all in violation of Title 18, United States Code, Section 1344.

7
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 8 of 12

A. Background

1. The allegations contained in paragraphs 1 through 14 of the General Introduction of this

Indictment are incorporated by reference as if set fo1th fully herein.

B. The Scheme and Artifice to Defraud

1. On or about March 8, 2021, JAMES FRANK AUSTIN, JR. submitted and caused to be

submitted a PPP second draw loan application on behalf of POF.

2. In the false and fraudulent PPP loan application JAMES FRANK AUSTIN, JR. certified to

the following:

a. That POF was in operation on February 15, 2020, has not permanently closed, and was

either an eligible self-employed individual, independent contractor, or sole

proprietorship with no employees, or had employees for whom it paid salaries and

payroll taxes or paid independent contractors.

b. That POF had received a First Draw PPP loan.

c. That POF would use the funds to retain workers and maintain payroll or make mortgage

interest, rent, utilities, covered operations expenditures, covered property damage

costs, covered supplier costs, and covered worker protective expenditures as specified

under the PPP rules.

3. The false and fraudulent PPP application stated that POF had 18 employees and that POF's

average monthly payroll was $149,000.00. As a supporting document for the POF application

submitted to Legacy, JAMES FRANK AUSTIN, JR. included a fraudulent 2019 corporate

tax return for POF that was dated December 13, 2019. This fraudulent tax return showed that

POF paid $4,856,789.00 in salaries and wages in 2019.

8
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 9 of 12

4. However, IRS records reflect that POF's corporate tax return for 2019, that was signed by

JAMES FRANK AUSTIN, JR. on June 12, 2020, showed that POF did not pay any salaries

and wages. POF's bank statements do not reflect payroll as suggested in the false and

fraudulent PPP application.

5. T!1is PPP application was approved and POF was awarded $372,500.00 on March 15, 2021,

said funds being deposited into POF's Renasant account ending in 2481.

6. Instead of being spent on payroll or make mo11gage interest payments, lease payments, and

utility payments as specified under the PPP rules, JAMES FRANK AUSTIN, JR. used the

majority of these funds for personal use.

All in violation of Title 18, United States Code, Section 1344.

COUNT FOUR
(Money Laundering)

The allegations contained in paragraphs 1 through 14 of the General Introduction of this

Indictment are incorporated by reference as if set forth fully herein.

On or about June 4, 2020, in the Macon Division of the Middle District of Georgia, and

elsewhere within the jurisdiction of this Court,

JAMES FRANK AUSTIN, JR.,
and
ROSALEND WAY,

aided and abetted by each other, did knowingly engage in a monetary transaction in criminally

derived property of a value greater than $10,000.00, and which in fact was derived from specified

unlawful activity, namely, JAMES FRANK AUSTIN, JR. obtained an official check in the

amount of $30,880.62 made payable to Mercedes-Benz Financial, for the benefit of paying off a

loan in ROSALEND WAY'S name, which funds in fact were derived from a specified unlawful

9
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 10 of 12

activity, that is the allegations in Counts One and Two of this Indictment; all in violation of Title

18, United States Code, Sections 1957 and 2.

COUNT FIVE
(Money Laundering)

The allegations contained in paragraphs 1 through 14 of the General Introduction of this

Indictment are incorporated by reference as if set forth fully herein.

On or about July 10, 2020, in the Macon Division of the Middle District of Georgia, and

elsewhere within the jurisdiction of this Court,

JAMES FRANK AUSTIN, JR.,

did knowingly engage in a monetary transaction in criminally derived property of a value greater

than $10,000.00, and which in fact was derived from specified unlawful activity, namely, JAMES

FRANK AUSTIN, JR. obtained an official check in the amount of $119,840.00 made payable to

Foreign Cars International, for the purchase of a Bentley, which funds in fact were derived from a

specified unlawful activity, that is the allegations in Counts One and Two; all in violation of Title

18, United States Code, Section 1957.

FORFEITURE NOTICE
(18 U.S.C. § 981(a)(l)(C), 18 U.S.C. § 982(a)(l),
18 U.S.C. § 982(a)(2) and 28 U.S.C. § 2461(c)- Criminal Forfeiture)

1. The allegations contained in Counts One through Five of this Indictment are hereby

re-alleged and incorporated by reference into this Notice for the purpose of alleging forfeiture to

the United States of America, pursuant to the provisions of Title 18, United States Code, Section

981(a)(l)(C), in conjunction with Title 28, United States Code, Section 2461(c); Title 18, United

States Code, Section 982(a)(l ), and/or Title 18, United States Code, Section 982(a)(2).

2. Upon conviction of the offense(s) in violation of Title 18, United States Code,

Section 1344 set f011h in Counts One and Three; Title 18, United States Code, Section 1349, in

10
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 11 of 12

connection with Title 18, United States Code, Section 1343 set forth in Count Two; and/or Title

18, United States Code, Section 1957 set forth in Counts Four and Five of this Indictment, the

defendant(s),

JAMES FRANK AUSTIN,
and
ROSALEND WAY,

shall forfeit to the United States of America pursuant to Title 18, United States Code, Section

98 1(a)(l)(C), in conjunction with Title 28, United States Code, Section 2461 (c), any property, real

or personal, which constitutes or is derived from proceeds tr·aceable to the offense(s), or a

conspiracy to commit such offense; any prope1ty, real or personal, involved in such offense(s), or

any property traceable to such prope1ty, pursuant to Title 18, United States Code, Section

982(a)(l); anc:;1/or any prope1ty, constituting, or derived from, proceeds obtained directly or

indirectly, as a result of such violations, or a conspiracy to commit such offense(s), pursuant to

Title 18, United States Code, Section 982(a)(2), including, but not limited to, a money judgment

in an amount to be determined.

3. If any of the property subject to forfeiture, as a result of any act or omission of the

defendant(s):

(a) cannot be located upon exercise of due diligence;

(b) has been transferred, sold to or deposited with, a third person;

(d) has been substantially diminished in value; or

(e) has been commingled with other property which cannot be subdivided without

difficulty,

11
Case 5:24-cr-00048-MTT-CHW Document 1 Filed 09/11/24 Page 12 of 12

the United States of America shall be entitled to forfeiture of substitute property pursuant to Title

2 1, United States Code, Section 853(p), as incorporated by Title 18, United States Code, Section

982(b)(1 ), and Title 28, United States Code, Section 246 1(c) through Title 18, United States Code,

Section 981(a)(l)(C).

All pursuant to 18 U.S.C. § 981, 18 U.S.C. § 982, and 28 U.S.C. § 2461(c).

A TRUE BILL.

s/Foreperson of the Grand Jury
FOREPERSON OF THE GRAND JURY

PETER D. LEARY
UNITED STATES ATTORNEY
Presented by:

ELIZABETH S. HOWARD
ASSISTANT UNITED STATES ATTORNEY

Filed in open comi this~ day of September, AD 2024.

Deputy Clerk

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